HEICO Corporation (HEI): A Bull Case Theory

We came across a bullish thesis on HEICO Corporation (NYSE:HEI) on Make Money, Make Time’s Substack by Oliver | MMMT Wealth. In this article, we will summarize the bulls’ thesis on HEI. HEICO Corporation (NYSE:HEI)’s share was trading at $240.05 as of Dec 24^th. HEI’s trailing and forward P/E were 65.41 and 56.50 respectively according to Yahoo Finance.

Heico (NYSE:HEI) specializes in designing, producing, and repairing aircraft and advanced electronic equipment, serving commercial airlines, defense agencies, and industrial customers. The company has demonstrated impressive financial performance, with revenue growth accelerating to 37.26% and a robust gross profit margin of 39.23%. Heico has established itself as a free cash flow (FCF) powerhouse, with FCF per share climbing from $2.83 to $4.02 over the past year, underscoring its strong operational efficiency and ability to generate shareholder value.

Despite its remarkable growth and profitability, Heico trades at a premium valuation, with an EV/Sales (NTM) multiple of 8.1x and EV/EBITDA (NTM) of 30.5x, reflecting market confidence in its long-term prospects. While the valuation may deter immediate investment, it positions the company as an attractive candidate for investors seeking high-quality assets to monitor. A significant pullback could provide a compelling entry point, making adding Heico to a watchlist worthwhile. The company’s accelerating revenue growth and expanding free cash flow make it a standout player in its industry, with substantial potential for future gains if market conditions align.

HEICO Corporation (NYSE:HEI) is not on our list of the 31 Most Popular Stocks Among Hedge Funds. As per our database, 57 hedge fund portfolios held HEI at the end of the third quarter which was 53 in the previous quarter. While we acknowledge the risk and potential of HEI as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than HEI but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: None. This article was originally published at Insider Monkey.